Sustained increase in the number of women on boards of directors, despite regional differences

Two years after the implementation of the European directive on gender balance in boards of directors, BNP Paribas AM has published the results of its global study on the presence of women on boards of directors, results that show a positive increase compared to the data recorded the previous year in all regions. However, national disparities persist and results vary depending on the country.

Looking ahead to the 2024 general shareholders' meeting season, BNP Paribas Asset Management reaffirms its commitment to diversity, one of the fundamentals of its Global Sustainability Strategy.

Conclusions

• On average, women hold 29% of the positions on the boards of directors of the companies in which BNP Paribas AM invests, which represents an increase of two percentage points compared to 2022 (27%).
• Meanwhile, the average percentage of companies that make up the ISS database is 22%, also two percentage points above the figure recorded in 2022 (20%).
• In all regions, BNP Paribas AM invests in companies that show greater gender diversity than those making up the ISS database.
• Despite the increase recorded worldwide, geographical disparities persist: Europe, North America, Australia and New Zealand continue to be the most advanced regions in terms of board parity, both in the portfolios of BNP Paribas Asset Management and in the ISS universe.
• From 2025, BNP Paribas AM will strengthen its requirements and increase to 40% the minimum limit of women in the composition of the boards of directors of Europe, North America, Australia and New Zealand and South Africa.

Gender diversity is increasing in all regions. As fund managers, we have a fundamental role to play in advancing and achieving gender balance in the decision-making bodies of companies. We do this through voting and constructive dialogue. However, disparities still exist and we will continue to work to further promote both gender diversity and diversity in a broader sense in the companies in which we invest

Michael Herskovich, global director of responsible management at BNP Paribas AM

Encouraging results despite disparities between countries

Between 2021 and 2023, the women representation on boards of directors increased in all regions, both in the portfolios of BNP Paribas Asset Management (29% in 2023, compared to 25% in 2021) and in the ISS universe (22% in 2023, compared to 18% in 2021).

Globally, France is the country with the highest female representation among the companies in which BNP Paribas Asset Management invests (45% in 2023) and those included in the ISS universe (40% in 2023).

Regarding the BNP Paribas AM portfolios, the most significant changes have been recorded in Asia (14% in 2022, compared to 18% in 2023), Latin America (14% in 2022, compared to 19% in 2023), Australia and New Zealand (from 35% to 40% respectively). Female participation has increased by 1% in Europe compared to the previous year (37% in 2023, compared to 36% in 2022) and by 3% compared to 2021, but it is already one of the most advanced regions in terms of the number of women on boards of directors.

On the other hand, parity is still far from being achieved in Asia, especially in Japan, where the percentage of women on the boards of companies in which BNP Paribas Asset Management invests is only 17%, and 11% in terms of the ISS universe.

However, it is important to highlight the efforts that some countries are making to reduce existing differences. For example, India, Malaysia and Singapore have respectively a participation of women on boards of directors of 20%, 33% and 23% in terms of the companies in which BNP Paribas Asset Management invests, a diversity rate substantially higher than the rest of the countries in the region.

In North America, the United States has a representation of 33% female directors in the companies included in the BNP Paribas Asset Management portfolios, and 24% in the ISS universe, a percentage slightly lower than the required by the manager's policy, but still well above the industry trend.

Gender diversity on boards in the United States has steadily improved in recent years, although it still does not meet our standard. Just over half of the US population is female. Low director turnover rates, outdated hiring methods, and the United States' aversion to setting quotas - or even goals - contribute to this situation. It's not just about setting the right tone and promoting equity in the workplace, but also about effective risk management. If boards are truly seeking the best and brightest, they should have gender balance.

Johanna Lasker, CEO of BNP Paribas AM, USA